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HomeMy WebLinkAbout1992-04-01 EURA MINUTES,. ENGLEWOOD URBAN RENEWAL AUTHORITY APRIL 1, 1992 I. CALL TO ORDER. The meeting of the Englewood Urban Renewal Authority was called to order at 5:37 P.M. by Vice Chair Erica Byrne. Members present: Members absent: Also present: Whatton, Waggoner, Schmidt, Minnick, Byrne Stitt, Acting Executive Director/Executive Secretary Totten, Smith Deputy City Manager/Acting Director of Commu- nity Development Linda Martin II. APPROVAL OF MINUTES. February 5, 1992 Ms. Byrne asked for approval of the Minutes of .February 5, 1992. Minnick moved: Schmidt seconded: The Minutes of February 5, 1992 be approved as written. AYES: NAYS: ABSENT: ABSTAIN: Waggoner, Schmidt, Minnick, Byrne, Whatton None Totten, Smith None Ms. Schmidt noted that the Minutes of February 5 make reference to "projections" which were included in the initial draft of the Disclosure Statement. Mr. Stitt stated that these projections have been removed from the final document. III. REVENUE REPORT. Mr. Stitt reviewed the revenue report and revenue projections dated March 27, 1992. Property tax revenues posted y~ar-to-date are $95,772.61, or 11.50% ahead of the same time in 1991. Sales tax revenues posted year-to-date are $237,697.81, or 17.68% be- hind revenues of the same period in 1991. Mr. Stitt pointed out that the projections are based on receipts posted in March, and while the figures are down, it is quite early in the revenue year. Mr. Stitt pointed out that revenues for March have not yet been posted to the City books, and are not included in the figures before the Authority. Mr. Stitt sug- gested that by May, we should have a fairly good basis for esti- mated revenues for the year. 1 IV. BOND DISCLOSURE STATEMENT. Mr. Stitt stated that all modifications that Mr. Benedetti had suggested have been made to the Bond Disclosure Statement, as well as modifications suggested by Authority members. Mr. Stitt directed the attention of the Authority members to the last four pages, which is information required by and submitted to the State. Mr. Stitt asked if there were further comments regarding the Bond Disclosure Statement. Mr. Minnick expressed concern on the length of the document and the expense to the Authority to repro- duce and mail said document. Mr. Stitt acknowledged the fact that the document is lengthy, but noted that it is necessary to present to the bondholders a factual analysis of the revenue/bond default situation. Mr. Stitt stated that the bondholders do need to know that there are revenues coming in, and that those rev- enues are pledged to payment of the bonds. He suggested that this may be the last year a disclosure statement of this format is sent to bondholders, and that futur~ disclosures may be no more than one or two pages. Mr. Stitt asked if there were no further comments or suggestions on the disclosure document, that the Authority make a formal motion of approval ~ Minnick moved: Schmidt seconded: The Disclosure Statement to Bondholders is approved, as amended previously. AYES: NAYS: ABSENT: ABSTAIN: Schmidt, Minnick, Byrne, Whatton, Waggoner None Smith, Tatton None The motion carried. V. 1992 BUDGET. Mr. Stitt referenced the State reporting form, which required that a copy of the current budget be attached. Mr. &titt stated that he reviewed the Minutes of the Authority from August, 1991 to the current year, and while the budget has been discussed sev- eral times, there was no explicit motion to "adopt" the 1992 Bud- get. The City Council has discussed the request of the Authority to finance the expenses of 1992, inasmuch as the Authority has no independent source of funds, but the City Council has not ad- vanced funds for a "budget" to this time. Mr. Stitt stated that in completing the State Reporting Form, the figures which had been initially discussed by the Authority for 1992, were compiled in a different format and submitted to the State. Mr. Stitt stated that he discussed this situation with Legal Counsel Benedetti, and it was Mr. Benedetti's opinion that in the discus- sions of the Authority regarding the budget was implicit approval of the figures set forth. Mr. Benedetti also suggested that the 2 Authority ratify the previous discussions on the budget by Reso- lution. Brief discussion ensued. Schmidt moved: Minnick seconded: The Englewood Urban Renewal Authority adopt Resolution #1, Series of 1992, A RESOLUTION OF THE ENGLEWOOD URBAN RENEWAL AUTHORITY RAT- IFYING ACTION TAKEN ON AUGUST 7, 19 91, TO ADOPT THE 1992 BUDGET. AYES: NAYS: Schmidt, Minnick, Byrne, Whatton, Waggoner None ABSENT: ABSTAIN: Smith, Totten None The motion carried. Funds withheld by the Trustee from revenues paid in for bond pay- ments were discussed. Ms. Schmidt inquired if the Trustee had to justify what these funds are used for. Mr. Stitt stated that to his knowledge, the Trustee has not submitted any justification. VI. MISCELLANEOUS. Mr. Stitt shared an article which was sent to the office by Mr. Jim Kreidle of the Kirchner Group, which article was published in the Defaulted Bond Newsletter, a national publication. It states, among other things, that the Authority has been in de- fault since December, 1989; that bankruptcy proceedings have been filed by Brady (developer of Trolley square), 3B (developer of Buyer's Club), and by Laventhol-Horwath. Discussion ensued. VII. DIRECTOR'S CHOICE. Mr. Stitt stated that he had nothing further to bring before the Authority. VIII. COMMISSIONER'S CHOICE. Mr. Minnick asked for an update on Cinderella City. · Ms. Martin reported that there is an owner's meeting next week, and City of- ficials are trying to encourage that the meeting be held here in Englewood so the owners may see first-hand what is being dis- cussed. Brief discussion ensued. Mr. Waggoner discussed the issue that some bondholders are inter- ested in passage of legislation to extend the debt terms of tax increment issues, such as the EURA bonds. Mr. Waggoner stated that he understood a bill for such legislation was not introduced in this session. Mr. Stitt stated that it may come up in the next session. Mr. Stitt stated that there is currently a 25 year limit on bond issues, and they are asking that time limits be re- 3 moved totally. Mr. Waggoner noted that the bondholders may or may not come to the Authority to gain support for extension of the debt term. Mr. Waggoner stated he understood that the lan- guage in the proposed bill is to be reworked in an attempt to as- sure that everyone "wins". Ms. Martin pointed out that City Council is required to amend the Englewood Downtown Redevelopment Plan (Urban Renewal Plan) to allow the Authority to agree to the extension of time. Ms. Martin pointed out that any extension of time to repay the bonds will have considerable impact on the fi- nances of the City and of the School District. Ms. Martin stated that it will be very difficult for any City Council to support this proposal, which was begun by EURA bondholders, but will have an effect state-wide if approved. Discussion ensued. Ms. Martin suggested that review of the proposed legislation will probably occur mid-summer, and hopefully the bill can be written in a man- ner to promote a win/win situation, and will be something that Englewood "can live with". Ms. Byrne asked if the new state law would override an existing contract, such as with the EURA bondhold~rs. Further discussion followed. Ms. Martin pointed out that even were City Council and the EURA to support the extension of time to repay the bonds, the Authority is in default, and 100% of the bondholders would have to approve any change in the structuring of the bond issue. Mr. Darrell Smith, newly appointed Authority member, entered the meeting. Ms. Martin reiterated that the proposed legislation will be dis- cussed later this summer, and there may need to get ·the Authority and Council together to discuss a position to be taken on the proposal. Mr. Smith inquired if anything is being done to lower the leasing rates for prospective businesses in Trolley Square. Ms. Byrne pointed out that the Authority has no control over the leasing rates; the development is privately owned. Mr. Stitt stated that staff has discussed the issue of leasing rates with the leasing agent on many occasions; the owner/leasing agent has so far been unwilling to lower the rental price. · Mr. Smith discussed his concern on the appearance of vacancies along Broadway, and the problems with the design of Trolley Square. Mr. Waggoner asked if there had been discussion on further leases in Trolley Square. Mr. Stitt stated that "Newsland" has ex- pressed interest. Ms. Martin pointed out that one problem that has arisen is the fact that Newsland does have "adult" materials for sale, and the percentage of gross sales exceeds that which is permissible under the Comprehensive Zoning Ordinance. Ms. Schmidt commented that the city does not need any more "trash". 4 Mr. Smith inquired about the possibility of "redeeming" Trolley Square. Ms. Martin pointed out that they are current on payment of taxes. Mr. Smith stated that there has to be someway the city can take action and redo that section of Trolley Square along Broadway; the basement concept is not good and is obviously not rentable --businesses do not want to locate on a lower level. Mr. Smith noted that there had been discussion in the EDDA Min- utes of a small business fund; would this be available to offer incentives to tenants to locate in Trolley Square. Ms. Martin discussed the small business fund proposal, noting that there is quite a ways to go before this fund, as envisioned, is up and op- erating. The City currently has a small revolving loan fund which has assisted some businesses on tenant finish, facade im- provement, expansions, etc. Ms. Byrne asked why a businessman would want to locate in Trolley Square when they could get rea- sonable rental rates elsewhere. Mr. Smith asked how the EURA default has reflected on other bond issues the City has or may want to issue. Ms. Martin stated that since the default, the City has issued bonds on two programs: a $25,000,000 issue received an AA rating, and the paving district bonds, which are unrated, still came in with a rate comparable to the AA rating. The City itself has not had ~ny problems since the default. However, were another tax increment issue to be at- tempted, this could present problems. Mr. Waggoner noted that a lot of the rating for City bond issues is based on the past payment record of the City. Mr. Waggoner further pointed out that the EURA bond issue was sold with no guarantee of tenants, but was based on "projections" of revenue once the infrastructure was in place and the redevelopment built out. Mr. Smith stated that from his view point, to let the vacancies remain for another year is not good, and if the economy takes an- other downturn the City will begin losing other businesses. Mr. Smith strongly advocated that a way be found to emphasize to the owners of Trolley Square the need to lower the rental rate or redo the Broadway portion of the development. Ms. Martin stated that staff has ref erred a number of prospective busine_sses to the leasing agents, but they are unwilling to lower rates ~to get the structures rented. Ms. Schmidt asked what types of businesses are making money in this economic climate. Mr. Smith that high-tech operations are making money, but there is a need to divest funds back into the smaller businesses because large businesses are laying off em- ployees, and closing offices. Mr. Smith inquired about purchasing just the Trolley Square strip along Broadway. He stated that if attempts to get the leasing agents/owners to lower the rental price have been unsuccessful, then the City should repurchase that portion of the project, mar- ket a different type of bond issue to redo that section and get 5 it rented. Mr. Smith discussed a trust fund from New York which is covered by Lloyds of London, and the possibility of working something out for financing. Ms. Martin asked why a developer would not be interested in ac- quiring the property and revamping it. Mr. Smith discussed the project from the viewpoint of a developer, and pointed out that at the present time the project is not marketable, and that a de- veloper looks at the long-range picture --they need to know they can realize a profit from a project in the future. Mr. Smith stated that Colorado has already been through the depression, and the markets are coming back; however, this is not to say what will happen should another recession occur. Brief discussion en- sued. Ms. Byrne stated that if there was nothing else to be considered by the Authority, she would declare the meeting adjourned. Meet- ing adjourned at 6:45 P.M. 6